Small and medium size business and households regularly pay utility bills, such as for telephone, Internet connection, electricity, gas and water services. The process of payment in the United States typically involves the user or customer examining the utility bill issued and sent (normally by mail) by a utility service provider or company (utility) for correctness and thereupon issuing and sending a check in a courtesy reply envelope to a remittance center of the utility company. The check is received, processed and sent to a dearing process at the end of which the amount of the check is transferred from the user's account in the user's bank to the utility's account in its bank. In European countries, utilities frequently enter into an agreement with their customers which allow them to deduct the amount of the bill directly from the customer's bank account. Customers typically have ten days after receipt of the notification to dispute the validity of the bill. In either case, however, the process frequently includes complex and costly dispute resolution concerning the amount owed the utility by the consumer.
The cost of operating the utility payment system represents a significant portion of the total cost of operating the utility. The cost of operating the payment system is defined as combined cost incurred by the user (customer) and utility company in the process of accounting for the charges and the transfer of payment from customer to the utility service provider. This cost has increased relative to other costs in the last twenty years, particularly in the telephone industry. The reason for the increase is that because of technological improvements all fundamental operations of the telephone network have been cost-reduced and streamlined while the payment system has essentially remained the same.
It is difficult to establish a “good” economically effective payment system. The customer (payer) and the utility (payee) have an adversarial relationship in the context of a payment system. The payer desires to pay a minimum amount and the payee desires to be paid a maximum amount. In order for the payment system to be effective it should be as free as possible from dispute over the bill amount. To minimize such disputes, the payer and payee should have confidence and trust in the accounting process of the payment system such that the payer and payee have a simple, effective way of reaching an agreement on the amount to be paid. The majority of utilities today use only one source of information for billing provided by the utility which does not give confidence to the customer that the billing procedure is correct.
In the instance of usage-based charges the task of bill audit and verification by customers is frequently time consuming, and in the case of discrepancies between the received and expected bill—real or perceived—the results can be a potentially difficult and time consuming dispute resolution process with the utility. This is the case for disputes over the amount of telephone bills which is aggravated by the complexity of rates, fees and charges. Presently—particularly in the United States—telephone companies which generally operate in a commodity market attempt to favorably distinguish their services from competitors by introducing new and more complex charge plans which may include several variables such as distance (local, interstate, international) and time of day (day and night time charges) variables. Frequently businesses and households in order to minimize expenses use several different utility service providers causing even more time consuming and difficult bill auditing and verification procedures.
From a utilities viewpoint the billing and revenue collection is the single, largest expense, the efficiency of which determines profit margins and the ability of utilities to compete in an increasingly competitive marketplace. Constraints on global economic efficiency demand that the overall revenue collection system for utilities, defined as combined costs incurred in the process of payment/revenue collection by customers and utility service providers, be minimized.
Many payment applications have requirements for tracking and documentation of the charges. For example, the most common application of this type is a business expense report. In this application, an employee who incurred expenses on behalf of the employer or for the business of the employer must keep accurate records of all qualified charges. This includes purchases, entertainment, lodging and meal expenses. Typically, paper records of all qualified expenses are kept by the employee, and then at the end of a predetermined period of time data from the paper records is entered into a computer application such as a spread sheet. Then the paper receipts are attached and a printed expense report with the summary of all charges is submitted to accounts payable. All records at accounts payable are manually verified and then the employee is reimbursed. There are multiple variations of this scheme, when, for example, an employee is given a corporate credit card he or she can use for charges. In all variations, however, the entire process is essentially manual because there are no easily available computerized records of the charges. The process as it exists today is also very costly, labor intensive and prone to errors.
Other costly and inefficient areas encountered in verifying and paying bills includes tax accounting, other accounts payable, insurance and other popular healthcare accounts. In the case of healthcare accounts, the account holder is required to maintain accurate records of all healthcare expenditures. Another example of an ineffective payment management process includes an insured needing to keep track of all deductibles when collecting from the insurance provider.
Accordingly, it is an object of the present invention to overcome these and other drawbacks and disadvantages associated with the revenue collection system of usage-based utility industries or other verification and payment of bills, and provide a set of intelligent features in the case when usage-based payment applications employ credit/debit cards.